Morning papers: Nationalising RBS on the table

Senior government figures are discussing the possibility of buying out private investors in Royal Bank of Scotland and fully nationalising it amid mounting frustration at banks’ failure to lend to British businesses, reports the Financial Times.

Cabinet ministers are having conversations about whether to spend around £5bn buying up the 18 per cent of the bank the government does not own, although George Osborne, the chancellor, is opposed.

Fed says US economy has slowed, but not enough to take steps

The Federal Reserve dashed hopes for an early dose of extra monetary stimulus to boost the sluggish US economy, sticking to its existing programme of bond purchases but promising to “closely monitor” developments, reports the Independent.

The central bank’s Federal Open Market Committee pushed off a decision on whether to launch a new round of quantitative easing.

Pressure on Spain to bow to bail-out

Italy’s leader Mario Monti is to make a last-ditch effort today to persuade Spain to swallow its pride and accept a formal rescue, hoping to clear the way for double-barrelled action by bailout funds and the European Central Bank, reports the Daily Telegraph.

Greece agrees to £9bn ‘troika’ cuts

Greek political leaders have agreed to €11.5bn (£9bn) of austerity cuts demanded under its bailout terms, opening the way for a deal with foreign lenders within the month, Greek officials said, reports the Daily Telegraph.

Bundesbank urges ECB to keep within remit

The head of Germany’s Bundesbank has warned the European Central Bank against straying beyond its remit, as the bloc’s central bankers gathered on Wednesday night to discuss a possible plan to restart intervention in government bond markets, reports the Financial Times.

Jens Weidmann, Bundesbank president, said the ECB’s independence “requires it to respect and not overstep its own mandate” to guard against inflation.

The Facebook flip: funds exit early

Twenty-one of Fidelity’s US-based funds sold more than 1.9m public Facebook shares combined in June, with 16 of them selling more than a quarter of their stakes in the company, according to Morningstar, reports the Wall Street Journal.

It is unclear whether the Fidelity funds - which are not available to UK investors - made or lost money on the Facebook shares, but the stock has languished below its $38 offering price on May 18.

Fidelity is the US’s third largest fund manager and was one of the first institutional investors to take a significant stake in Facebook.

Electronic trading glitches hit market

An electronic trading glitch roiled US trading in nearly 150 stocks early on Wednesday, sparking confusion among traders and investors and further undermining confidence in the basic machinery of financial markets, reports the Wall Street Journal.